Calderdale Council tells DECC that Green Deal is “cause for concern”

A Calderdale Council Report on home energy conservation plans for the next two years is critical of the new Green Deal and Energy Company Obligation policy. It advocates “more equitable”, publicly-funded home insulation and other measures to help householders save energy and reduce their energy bills. Calderdale Council Cabinet approved and adopted the Report at its May 2013 meeting.

The Home Energy Conservation Act (HECA) Report, produced by the Council’s Director of Economy and Environment for the Department of Energy and Climate Change (DECC), says that Calderdale Council agrees with National Energy Action that home energy conservation measures should be Treasury-funded through general taxation – not paid for by households taking out Green Deal loans.

Helen Rhodes, Calderdale MBC Private Sector Housing manager, said,

“Calderdale Council is a member of NEA.  The NEA has been very clear on its view that general taxation revenues should be used as a fairer way of funding energy efficiency works.  This has been clearly communicated to NEA members through its partnership network meetings.  This message is also endorsed in a NEA press release and also in written evidence submitted by the NEA to parliament.

National Energy Action also supports the Energy Bill Revolution campaign, which calls for public funding for home energy conservation, to be paid for out of new carbon taxes.

Asked whether Calderdale Council supports the Energy Bill Revolution, Helen Rhodes said,

“We have no comment to make on the Energy Bill Revolution at this stage, but we will discuss it further internally.”

But in September 2012, Calderdale Council resolved to support the Energy BIll Revolution Campaign

Update 24th July 2013 – The Calderdale Council Meeting Minutes of 27th September 2012 show that Calderdale Council resolved that,

“this Council supports the Energy Bill Revolution campaign calling for the Government to recycle revenues from carbon taxes into improving the energy efficiency of UK homes; and

this Council agrees to notify local Members of Parliament of its support for the campaign and urge them to sign Early Day Motion 47 – “Reducing Fuel Bills through Energy Efficiency”.

This Council resolution was in response to a motion on Reducing Fuel Bills Through Energy Efficiency moved by Councillor D Young and Seconded by Councillor Lynn. However, despite passing this resolution at Calderdale Full Council on 27th September 2012, as of July 2013,Calderdale Council had not actually signed up to support the campaign.

Asked by Councillor Young to investigate why the resolution has not been acted on, Peter Burton, Calderdale Council Democratic Services manager, emailed that he cannot find any record of what happened.

This would explain why Helen Rhodes was unaware of Calderdale Council’s support for the Energy Bill Revolution Campaign.

Update: Councillor Young pursued the matter for several months and finally Calderdale Council did actually sign up as a supporter of the Energy Bill Revolution Campaign, as resolved by full Council in September 2012.

4 months into the Green Deal, a Green Deal Provider has gone bankrupt and rates of cavity wall insulation have collapsed

Since Calderdale Council adopted the HECA Report, a Green Deal provider has gone bankrupt. A Green Deal Provider is a company or organisation that provides the whole Green Deal shebang – it offers loans, based on  recommendations by a Green Deal Assessor, and arranges for the installation of energy saving measures.

Enact, a Green Deal provider in Cornwall, went into administration on May 30th, four months after the launch of the Green Deal. Before becoming a Green Deal provider, this well- established company,  set up in 1996, had carried out over 300K home energy efficiency upgrades across the UK, installing a variety of energy efficiency and renewable energy measures.

Enact’s bankruptcy could have something to do with the collapse in the number of cavity wall insulations since the start of the Green Deal – a collapse which critics of the scheme had predicted.

The director of the Association for the Conservation of Energy, Andrew Warren, says that the Green Deal is at serious risk of failure. The number of cavity walls insulated fell by 97 per cent between April 2012 and April 2013, when the Green Deal had been under way a couple of months.

Tthe Guardian has discovered that DECC is refusing to release progress reports on the Green Deal – and another 11 of its 13 major projects.

This means there’s no way for the public to know if the Green Deal – and DECC’s other major projects – are running over-budget, over-time, or have been assigned “red” status, which means “successful delivery of the project appears to be unachievable”. So much for democratic accountability.

Finn Jensen, who represents BEAT on Calderdale Energy Future’s panel said,

“The government’s Green Deal is a missed opportunity. We urgently need all homes, businesses, community buildings and so on insulated to the highest possible standard – not only to reduce energy poverty and energy bills but also to reduce our greenhouse gas emissions to avoid catastrophic climate change. The Green Deal will not provide this change.

People who take out a loan through the Green Deal will be paying a very high interest rate for the work. As the Green Deal’s golden rule will only allow work that can pay off the loan and the interest by the savings made in reduced energy bills, a lot of necessary insulation work will not be carried out as the golden rule sets the bar too high.

Ideally, all the insulation work that can be carried out should be carried out over a number of years, if necessary by making it mandatory and free of charge funded by some sort of subvention on carbon tax.”

Calderdale Council’s concerns about the Green Deal and ECO

Calderdale Council’s HECA Report identifies the Council’s 2013-15 plans for reducing fuel poverty and residential carbon emissions in the Borough – within the limitations of the new Green Deal and Energy Company Obligation (ECO) policy, which the Coalition government has foisted on local authorities.

The Report notes that the Green Deal and ECO  provide less funding than was previously available for insulation and other energy-saving measures.   This gives Calderdale Council “cause for concern” – particularly since the new Green Deal and ECO policy leaves the more vulnerable households worse off, in terms of access to funding to improve home energy efficiency.

The Council points out that the ECO is problematic, because it makes the energy companies responsible for the reduction of residential carbon emissions. But the energy companies exist to maximise their profits and shareholder value, so they will invest their ECO subsidies in the cheapest energy-saving measures that will deliver carbon reductions. They will not focus on assisting the poorest households to reduce their energy consumption and bills.

While all householders pay for the ECO through their energy bills, the benefits of ECO subsidy are not fairly distributed among households. Only 25% of the ECO is directed towards households on the lowest incomes.

There is also a lack of fairness between benefits for different parts of the country. Calderdale’s Report states,

“Until a fairer way of ECO distribution is identified, residents in boroughs like Calderdale will continue to be discriminated against because of the nature of the local housing stock.”

Houses in Calderdale are mainly old, with solid walls or rubble-filled cavities and attic bedrooms instead of easily-insulated lofts. It is very expensive to insulate them.  So the energy companies will not invest their ECOs here, since the carbon savings would be very expensive compared to areas of the country where houses can be cheaply insulated through cavity wall and loft insulation.

Typical old Calderdale houses-Photo credit:Jenny Shepherd

Calderdale Council calls for change  

Calderdale Council’s HECA Report wants:

  • more equitable funding for home energy conservation, paid for by the Treasury out of general taxation
  • simpler, clearer, cheaper methods of marketing and administering ECO-funded home energy efficiency schemes
  • local authorities to be allowed to deliver the Home Cost Heat Reduction of element of the ECO, in order to make sure that most vulnerable householders can get a fairer deal. This would reduce fuel poverty and make warm homes more affordable.

Meanwhile, faced with the Green Deal…

Calderdale Council is working with Leeds City Region local authorities to try and find a way to get 12,000-15,000 local households across the Region to take out Green Deal loans to pay for energy saving investments in homes by 2017. 1,000 of these should be in Calderdale.

Leeds City Region is shortly to carry out market testing to figure out what sort of Green Deal provider they will need to identify and select. Green Deal Providers are able to offer households access to Green Deal loans.

The Report states,

“Calderdale is testing Green Deal and ECO principles through a Green Deal Demonstrator project on selected areas of system built and stone terraced properties. A final project report will be available later this year in October 2013.”

Here as elsewhere across the country, the process of getting the apparently doomed Green Deal off the ground is dragging itself out. Two years ago Calderdale Council carried out a pilot project to find out about likely take up for the Green Deal. Still without a Leeds City Region Green Deal provider, and now carrying out a Demonstrator project, Calderdale Council doesn’t seem much closer to rolling out the Green Deal in the Borough.

Dragging out the process of launching the Green Deal actually makes a lot of sense.

The Green Deal is a ridiculously ill thought-out scheme, driven by the Coalition government’s ideological obsession with private finance initiatives rather than by any rational attempt to reduce fuel poverty, energy use and carbon emissions.

With any luck, the scheme will be cancelled before Leeds City Region local authorities have to herd their populations into taking out loans that may well end up not meeting the so-called Golden Rule – that the cost of repaying them will be covered by the energy bill savings that result from the home energy efficiency improvements the loans have financed.

Updated 19 June 2013 with comments from Helen Rhodes, Calderdale MBC Private Sector Housing Manager

Updated 27 April 2014 with (belated) news that Calderdale Council finally signed up to Energy Bill Revolution, as mandated by the Council meeting of 27 Sept 2012

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